A recent survey finds the family, expat attrition, and compliance are relocation’s toughest challenges. But there are benefits too.
By Cindy Madden
It’s always tough to predict the future when it comes to the relocation industry, but one topic continues to be a major challenge, finds the 2014 Trends in Global Relocation: Global Mobility Policy and Practices survey from Cartus. Family and its impact on transferring employees is indeed a pressure point for corporate relocation.
In the survey of 172 international mobility managers, family issues occupy two of the top 10 issues that HR practitioners need to keep on their radar. Those family- related concerns facing companies and their relocating employees include:
1. Family members may be less likely to accompany employees on assignment. The number of respondents who said family members were always allowed to accompany the assignee on long-term assignments decreased from 90 percent to 76 percent. This could reflect growing concerns related to emerging markets, which can be unsuitable for families, or even traditional locations where costs can be high. It could also be a result of cost containment, which has now been prevalent for the last four or five years.
Stress can also occur in split family situations when the assignee and family live in separate locations during the assignment, with the employee traveling back and forth. This is more common with short-term assignments or if the employee is sent to an emerging market with little infrastructure in which a family can thrive.
2. Family adjustment is a leading reason assignments fail.
Survey respondents (61 percent) listed inability of the family to adjust as the number two reason assignments fail. It is only eclipsed by changing business conditions (63 percent) as a reason for assignment failure. Additionally, the importance of family is reinforced by the fact that 76 percent of respondents rated family or personal circumstances as the number one reason why employees turn down assignments. Many companies still do not properly prepare assignee families for life in global destinations by providing cultural and language training. This lack of preparedness and proper expectation setting can result in failed assignments.
Cartus also found eight other noteworthy trends surrounding corporate relocation:
3. Expat exodus. Despite the admittedly high cost of assignments and the risk of their decreased return on investment (ROI) when assignees leave the company, it’s interesting to note that 75 percent of responding companies don’t track their assignees’ careers after they return from abroad.
4. Cost control and compliance continue to be organizational challenges. Cost control was named by 75 percent of respondents as the top global mobility challenge in terms of future impact on their organization. Overall compliance (at 62 percent and up 12 percentage points) and immigration (at 57 percent and up 13 percentage points over 2012) rounded out the top three. In the area of compliance, companies indicate that early involvement of tax and immigration providers (70 percent), more clearly defined policies and processes (49 percent), and better tracking of assignees’ days in country (47 percent) are the three areas in which they are planning increased focus.
5. Half of companies expect mobility volume to increase.
While the majority of respondents indicated that their mobility activity was status quo, over the past two years, 50 percent of companies expect to see mobility volume increase overall for the upcoming two-year period. The assignment type expected to make the biggest jump is developmental, at 54 percent. Unlike several years ago, developmental assignments are now primarily for executives and management. Next in line are short- term assignments (52 percent) and permanent transfers (52 percent), followed by extended business travel (50 percent).
6. Increasing importance of talent management. Companies are increasingly aware of the importance of grooming— and keeping—top talent, as well as the need to make sure the right people are identified and prepared for the job. Several of the indicators of how closely companies are linking their global mobility and talent/HR functions are showing upticks. According to the survey, 31 percent of respondents said there was a close relationship between the global mobility function and their organization’s other HR and talent functions (up 10 percentage points from 2012). Plus 38 percent of respondents said their global mobility program was critically important to achieving short-term business goals (up 13 percentage points from 2012), and 63 percent said global mobility was critically important to strategic global expansion (up 12 percentage points from 2012).
7. Developmental assignments are expected to rise. The assignment type predicted to be the fastest growing over the next two years—developmental—is also typically used as a key tool for talent development. Seventy-nine percent of respondents consider the main purpose of these assignments to be leadership and management skill development.
8. Relocation programs need tweaking. The top three areas organizations said they were most interested in improving were upfront assignment planning (55 percent), cost containment (46 percent), and candidate assessment and selection (44 percent). These were followed closely by repatriation and career management and return on investment.
9. Talent gaps still exist. In 2012, 31 percent of respondents said the availability of local talent was a factor in decreasing their assignments. In this year’s survey, the ability to find talent locally is no longer a big factor (only 14 percent of respondents named it) in allowing companies’ to be able to decrease assignments. This could reflect an awareness of the importance of the right training and background for many assignments, or the difficulties of finding skilled talent in emerging markets, or both.
10. Language and cross-cultural training drive assignment success. As previously discussed, family woes ranked among the top three reasons why assignments fail. Given that, it’s not surprising that companies appear to be acknowledging the importance of support to enhance the chances of successful adaptation to the new location. Among these, language and cross-cultural training are key.
Lastly, the survey also found a profound shift from 2010: the majority of transferees are now in the 40+ age group, a trend that Cartus reported in 2012, which is supplanting a younger population that was more prominent in 2010.
Cindy Madden is director of consulting solutions for Cartus Corp.